Lengthy Sentences for Fen-Phen Attorneys Who Stole Settlement Funds

Two former lawyers were handed hefty federal prison sentences on Monday for stealing settlement funds from their clients.
William Gallion and Shirley Cunningham had represented over 400 clients
in a drug-injury lawsuit against pharmaceutical company American Home
Products (now Wyeth) over fen-phen diet drugs.

Gallion and Cunningham were sentenced to 25 and 20 years, respectively, after their convictions for fraud and conspiracy.

When the attorneys agreed to a $200 million settlement
with AHP, according to the Louisville Courier-Journal, they would have
been entitled to a fee in the neighborhood of $60 million. Instead,
they kept the settlement amount secret and managed to set aside over
$100 million for themselves and others.

The attorneys claimed the
money set aside was intended to pay any additional victims who might
come forward, but none ever did, and the two apparently decided to keep
it for themselves rather than distribute it to the plaintiffs.

At
the sentencing, U.S. District Judge Danny Reeves accused the two of
"unbridled greed," imposing the stiff sentences in part because the men
had showed no remorse, and in part to deter othe lawyers from stealing
settlement funds. The sentences were actually less than prosecutors had
asked for.

The two were also hit with a restitution penalty.
They will owe their victims another $127 million, on top of the $25
million judgment already levied in a civil proceeding. The lawyers'
defense -- relative inexperience in handling large
class-actions -- clearly did not hold water with the jury or with
Reeves.

So,
decades in federal prison, at least $150 million in monetary penalties,
and for good measure, permanent disbarment. Obviously, this was an
extraordinary theft involving tens of millions of dollars, but it will
still be worth remembering the next time you are tempted, even a
little, to mess with client funds.